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Canada Inflation Slows to 2.2% in October as Gas and Grocery Costs Ease

The latest reading strengthens expectations the Bank of Canada holds its 2.25% policy rate.

Overview

  • Annual CPI was slightly above the 2.1% Reuters consensus and down from 2.4% in September.
  • Gasoline prices fell 9.4% year over year as retailers switched to cheaper winter blends and crude prices dropped, with the earlier carbon levy removal continuing to depress annual comparisons.
  • Excluding gasoline, inflation held at 2.6% in October, unchanged from September.
  • Core measures watched by the central bank eased to CPI-median 2.9% and CPI-trim 3.0%, remaining above the 2% target.
  • Shelter costs were mixed, with mortgage-interest-cost inflation at 2.9% for its first sub-3% reading in over three years while rent inflation stayed above 5% and continued to accelerate.